Precious metals miner Sibanye-Stillwater has entered into an agreement with TSX-listed Regulus Resources, and its newly formed subsidiary Aldebaran Resources, to create a strategic partnership to unlock value at the Altar copper/gold project, in San Juan province, Argentina.
Under the terms of the agreement, Sibanye’s wholly-owned subsidiary Stillwater Canada will enter into an option and joint venture agreement with Aldebaran, whereby the latter will have the option to earn a maximum 80% interest in a wholly-owned subsidiary of Stillwater Canada – Peregrine Metals.
Peregrine owns the Altar project.
Concurrently, Regulus will also spin out its Rio Grande copper/gold project and other early-stage mining assets in Argentina to Aldebaran, including the drill-ready Aguas Calientes gold/silver project.
Aldebaran has entered into a subscription agreement with Route One Investment Company, which has committed to providing initial financing of at least $30-million to Aldebaran.
Pursuant to the arrangement, Aldebaran may also elect to earn a further 20% interest in the Altar project by spending an additional $25-million over a three-year period following the initial earn-in.
The arrangement sees Sibanye benefit from upfront proceeds of $15-million and a 19.9% shareholding in Aldebaran.
Moreover, the miner retains a direct interest in the Altar project of either 40% or 20%, as well as an indirect exposure though its shareholding in Aldebaran.
Additionally, through its shareholding in Aldebaran, Sibanye will have indirect exposure to the Argentinean exploration assets that Aldebaran will be acquiring from Regulus as part of the arrangement.
Sibanye states that the arrangement creates a “new, well-capitalised, Argentinean-focused exploration company”, which is expected to benefit from the synergies derived from exploring a multiproject portfolio.
“This transaction is consistent with our strategy of maintaining our focus and investment on our core mining operations. We believe Aldebaran possesses the vision, skills and experience to unlock the considerable upside potential of the Altar project, in which we will continue to hold a meaningful interest,” commented Sibanye CEO Neal Froneman.
Regulus CEO and director John Black added that the agreement is designed to provide immediate benefits to the shareholders of both companies, as well as exposure to significant future upside potential from an attractive portfolio of exploration projects.